Category: Russia

On July 22, 2016, the Liniya Prava Law Firm signed a cooperation agreement with the Corporation for Development of the Republic of Bashkortostan (CDRB) in the person of CDRB General Director Artem Kireev.

Bashkortostan, which is also known as Bashkiria, is a Russian republic located between the Volga River and the Ural Mountains. With a population of over 4 million people, it is the most populous of the Russian republics.

Under the agreement Liniya Prava lawyers will assist the region and investors with projects involving inbound and outbound foreign direct investments, especially the ones related to China and other Asia-Pacific countries. The agreement sets out the terms and conditions of the collaboration between the firm and the CDRB, aimed, Liniya Prava reports, “at providing full-service tailored legal support of all current and purported investment initiatives of the Corporation of Development on the territory of and/or in partnership with the Republic of Bashkortostan.”

According to Liniya Prava, the CDRB — which was established in 2010 to facilitate investments in the region — “provides complex support of investment projects, delivers services in corporate governance, and develops industrial parks in the Republic of Bashkortostan.” Liniya Prava reports that the CDRB “acts as a managing company of the industrial parks Chimera and Ufa and is a member of the Association of Industrial Parks and of the Association of Clusters and High-Technology Parks.”

Alrud has advised Russian entrepreneur Igor Sosin on the sale of his 49% share in a Russian joint venture with OBI, the German supplier of household and repair goods, to the German company.

Sosin and OBI were partners in OOO “Sdelano Svoimi Rukami” (SSR) – a company developing a DIY-chain under the OBI brand in Russia. According to Alrud, “as a consequence of the deal, which is one of the most significant in the retail sector this year, the German company has received an opportunity to consolidate its business in Russia.”

The Alrud team was headed by Partner Alexander Zharskiy.

The Alrud dispute resolution team has claimed success in its representation of the joint-stock company TVEL in a dispute with Westinghouse Electric Company LLC.

TVEL, a company in the Russian state-owned Rosatom group, is the only Russian nuclear fuel exporter.

According to Alrud, “in 2012, the Vice-President of Westinghouse Electric Company LLC, [an] American competitor of JSC TVEL, in an interview with a leading Ukrainian business periodical stated that when used in South-Ukrainian nuclear facility, JSC TVEL’s nuclear fuel caused deformation of nuclear fuel produced by Westinghouse Electric Company LLC.”

TVEL filed a claim “on protection of business reputation” with the Arbitrazh court of the city of Moscow against Westinghouse Electric Company, the Ukrainian periodical editor’s office, and the author of the article. According to Alrud, “the procedure was complicated by the fact that the Ukrainian defendants avoided appearing in court hearings, so they had to be notified via the Ukrainian justice institutions.”

The Arbitrazh court of the city of Moscow upheld TVEL’s claim, finding that the disputed statements discredited the business reputation of TVEL, and obligated the plaintiff – the Ukrainian periodical – to publish the substantive part of the resolution on its website.

Alrud’s team was headed by Senior Partner Vassily Rudomino and included Senior Associate Sergey Petrachkov, Associate Nikolai Volodin, Attorneys Azat Akhmetov and Anastasiya Popova.

White & Case has advised CJSC Sberbank CIB as agent to the Russian Federation, and Sberbank CIB and VTB Capital as joint global coordinators and joint bookrunners, on the USD 812 million privatization of the Russian Federation’s 10.9 percent stake in the charter capital of PJSC ALROSA, the world’s leading diamond mining company. Cleary Gottlieb Steen & Hamilton advised PJSC ALROSA on the deal.

The deal is Russia’s largest privatization since the 2013 IPO of PJSC ALROSA, on which White & Case advised the agent and the underwriters. It was conducted by way of a Rule 144A/Regulation S equity offering of ordinary shares in PJSC ALROSA, which is listed on the Moscow Exchange.

The White & Case team advising on the transaction was led by Partner Darina Lozovsky and Moscow Local Partner Dmitry Lapshin and included Partner Inigo Esteve and Associates Amulang Povaeva and Yulia Petelina.

The Pepeliaev Group has announced that commercial and antitrust specialist Radmila Nikitina has left the YUST firm to become the head of the Pepeliaev Group’s Commercial Practice.  

According to the Pepeliaev Group, Nikitina “has significant experience in advising Russian and foreign companies on issues relating to cartels, the implementation of concerted practices, restrictive agreements, abuse of a dominant position and unfair competition. In one of her recent major projects, Radmila represented a subsidiary of Gazprom in an investigation into a cartel agreement entered into by producers of steel pipes.”

Nikitina spent the previous six years with YUST — the last four as the Head of its Competition Group. She spent the two years before that with Alrud. She received her law degree from the Saint Petersburg State University in 2004, and obtained an LL.M. from the University of Amsterdam in 2007.

Nikitina succeeds Oxana Migitko, who previously led Pepeliaev Group’s Commercial Practice, but who has now taken what the firm describes as “study leave.”

Also joining the firm is Associate Alexander Shugav (who also comes over from YUST) and Senior Associate Sergey Lapin (who joins from Nadmitov, Ivanov & Partners). 

Commenting on the additions, Pepeliaev Group Managing Partner Sergey Pepeliaev said: “Pepeliaev Group’s Corporate Division is one of the key divisions in our firm. It generates substantial income for our business and attracts new clients. We are sure that this latest strengthening of our team will allow both our corporate practice and the firm itself to continue on its upward trajectory of growth.” 

Liniya Prava has prepared the investment agreement signed on June 16, 2016 by the French company Arc International to construct a glass manufacturing plant in the Chernyakhovsk industrial park in the Kaliningrad region of Russia.

The overall estimated investments amount to RUB 6.5 billion. Construction of the plant, which is expected to possess a production capacity of 53,000 tons per year, is expected to start by the end of 2016 on a 45 hectare section of the industrial park leased by Arc International from the Kaliningrad region government. Liniya Prava reports that “starting from 2018 the plant will produce table glassware made of common and toughened opal glass,” and says that “it will become the first plant producing glassware made of opal glass across the CIS countries and Eastern Europe. It is predicted that implementation of such large-scale production project will result in creation of 1050 new jobs.”

The Liniya Prava team “carried out a detailed legal analysis of draft investment agreement establishing order of provision of state support for construction of the glass manufacturing plant, proposed by the Government of the Kaliningrad region, and prepared a draft agreement for signing, taking into account the parties’ lawful interests and legal requirements.”

“We were pleased to provide legal support in the course of the project, involving entry of a major international player into the Kaliningrad region,” commented Liniya Prava Partner Vadim Konyushkevich. “The project displays popularity of various forms of cooperation between state and private businesses for performing large-scale investment activity in Russia by foreign corporations. For sure, successful implementation of similar projects has positive effect both on general investment climate in the country and on boosting economic indicators of regions, providing beneficial treatment for foreign investors.” 

Goltsblat BLP, the Russian Practice of Berwin Leighton Paisner (BLP), has — jointly with BLP — advised Irish regional airline CityJet on negotiating a framework agreement for delivery of 15 firm and 16 optional aircraft, including leasing documentation and engine and airframe support services agreements. The contract value of the deal is more than USD 1 billion, including options and aftersales services.

Founded in 1993, CityJet operates a network of routes primarily from London City Airport in addition to wet-lease services on behalf of European airline customers and a substantial charter business. It employs 670 staff at bases in Finland, France, Ireland, Sweden, and the UK, and operates a fleet of 18 Avro RJ85s and eight Bombardier CRJ900s.

According to Goltsblat BLP, “this is an important milestone for CityJet in expanding its fleet and a ground-breaking transaction for Sukhoi, as CityJet becomes the first Western European Airline to take delivery of a SuperJet. The new generation jet will fulfil CityJet’s requirements for operating from airports in Europe, including London’s City Airport, and offer significant advantages in fuel efficiency, emission ratings and noise reduction.”

The first Sukhoi Superjet aircraft were delivered on June 3, 2016 in Venice, Italy, at the headquarters of SuperJet International. The airline expects to receive three SSJ100s this year and the rest from 2017 onwards. Superjet International configured the CityJet aircraft in a 98-seat cabin layout with the interior designed by Italy’s Pininfarina. 

Andrey Goltsblat, Managing Partner of Goltsblat BLP, commented that: “We are very proud to advise such a reputable operator as CityJet. This is strategic deal for both CityJet and Sukhoi SuperJet and our international team was pleased to be part of it.”

Goltsblat BLP Partner Oleg Khokhlov added: “This deal highlights the achievements of Sukhoi SuperJet in the international arena and we hope that other international airlines and leasing companies will follow. We were very pleased to work for CityJet and to demonstrate our international capabilities.”

The Goltsblat BLP team in Moscow consisted of Partner Oleg Khokhlov and Associate Dmitry Ionov. The BLP team consisted of Consultants Tom Budgett and Rebecca Quayle, who led the transaction, assisted by Senior Associate Marina Litvak and Associate Deborah Boddy, as well as members of “BLP’s Preferred Network” in Switzerland and Italy.

Image Source: www.scac.ru

Vegas Lex has prepared Russia’s first “federal special investment contract” for the Russian Federation and the Russian subsidiary of Germany’s CLAAS group of companies.

CLAAS is a German engineering group and manufacturer of agricultural machinery, headquartered in Harsewinkel (Nordrhein-Westfalen). The company, which employs more than 11,000 people, reported a turnover of EUR 3.8 billion in 2013. Vegas Lex reports that the company’s Krasnodar plant, which modernized at the end of 2015, “is the most up-to-date agricultural engineering facility in Europe.”

On June 17, 2016, CLAAS and the Russian Federation (represented by the country’s Ministry of Industry and Trade) entered into the country’s first federal special investment contract (SIC) at the St. Petersburg International Economic Forum. According to a Vegas Lex press release, the law firm “prepared the required documents, and [was] directly involved in the negotiations for the conclusion and subsequent implementation of the SIC in the interests of CLAAS.”

As the result, CLAAS received the official status of Russian supplier of agricultural machinery, which means that the purchase of its products is entitled to financial support from the state. CLAAS, in turn, committed itself to moving more of its technological operations to local industrial facilities and to invest an additional RUB 750 million in its Russian assets.

“All we want is to work on an equal footing with other leading farm equipment manufacturers,” said Ralf Bendisch, General Director of CLAAS and German Honorary Consul in Krasnodar. “We have gone a long way to ensure that the CLAAS plant in Krasnodar is recognized by a Russian manufacturer, and we believe we have earned this recognition. Of the 45 suppliers we use, only seven are outside the Russian Federation. We pay taxes to the Russian budget and have actually remitted over RUB 2 billion to budgets of different levels, raising the profitability of Russian agricultural businesses. Higher production volumes and lower prices will only increase the benefits for the Russian economy.”

According to Vegas Lex, Russia’s Ministry of Industry and Trade has recently used the CLAAS project and SIC consultations with other foreign manufacturers (including Mazda Motor, DMG Mori, KOVOSVIT, Hyundai Motor CIS, among others) to draft the necessary amendments to relevant Government Resolutions to clarify the rules for concluding, modifying, and terminating a SIC, as well as the SIC template to be used.

The Vegas Lex team was led by Partner and Head of Special Projects Maxim Grigoryev.

Russia’s KIAP law firm has announced the launch of a new Commercial practice, to be headed by Julia Kirpikova, and “curated” by Partner Ilya Ischuk.

According to KIAP, “segregating the commercial direction into a separate practice has resulted from an increased number of client requests related to doing business in Russia, a rise in the quantity of legal inspections, and the need to develop a system of new contractual links and bring a company’s internal regulations into correspondence with the new realities of the Russian economy.”

The firm also reports that, “besides the basic services, additional areas of activity include consulting clients in the sphere of e-commerce and electronic payment systems, developing and analyzing documents governing sales promotion, providing legal support in the sphere of personal and confidential data protection, and providing legal assistance in the sphere of licensing of certain types of activities and environmental regulation.”

“We are happy to congratulate Julia on the appointment,” commented Managing Partner Andrey Korelskiy. “Well-deserved promotions always inspires our team to move further. I am sure that the new direction under Julia’s efficient management will be highly appreciated by our clients”. 

Orrick has represented Russian banks Sberbank and VTB as providers of RUB 70 billion (approximately USD 1.1 billion) in financing for Telmamskaya HPP LLC (a 100% subsidiary of EuroSibEnergo Group, which is part of the En+ Group, a leading Russian energy and natural resources industrial conglomerate). Baker Botts advised Telmamskaya HPP on the deal.  

The loan financed Telmamskaya HPP LLC’s RUB 70 billion acquisition of 40.29% of Irkutskenergo PJSC, a company that operates several hydroelectric power plants, thermal plants and electric networks, from Inter RAO Group. As a result of the deal EuroSibEnergo Group holds more than 90% of the shares in one of Siberia’s largest Russian power producers.  

“We were thrilled to put our extensive finance and energy sector experience to work in this exciting deal,” said Orrick Banking & Finance Partner Dmitry Gubarev, who led the the Orrick team along with Partner Konstantin Kroll. The team also included Associates Svetlana Gareeva, Victoria Bryxa, and Maria Illarionova. 

“It is worth noting that this transaction is one of select few syndicated financings to date in Russia fully done under Russian law to best international standards,” said Moscow-based Baker Botts Finance Partner Konstantin Garmonin, who led the firm’s team on the deal. Garmonin was assisted by Moscow-based Finance Associate Kira Gladkoborodova.